Gold Prices Are Down Right Now – It’s a Prime Time to Buy

Gold Prices Are Down Right Now – It’s a Prime Time to Buy

When metals are low, it’s a perfect time to buy, and gold prices are down right now. This could be an important, new price bottom before the next rally. If you have been waiting for the right moment to get in, this is it.

These past two weeks it has been a combination of factors weighing on metals. The Fed came out slightly hawkish this past week on interest rates. Initially on Wednesday leading up to the announcement, gold was making gains. However, the Fed’s sentiment was more hawkish than anticipated, and this boosted the dollar, which made gold pull back. Despite the hawkishness from the Fed though, it is worth noting how precarious the balancing game of monetary policy is right now (see Ron Paul video below for more). Last week there was a sharp drop due to a “fat finger” human error that spooked some investors. Gold recovered slightly the same day from the error, but it had already led to some panic selling.

What this means for investors: Gold and silver are both oversold right now, and it’s creating a perfect window for investors to buy more or get started for the first time investing in gold. In fact, options traders are positioning for a gold rebound. There are signs of recession indicators in bond yields, inflation, and retail that have made many investors still wary despite the Fed’s hawkish sentiment this week. If you are worried about the stability of the economic outlook, this week is likely the most ideal time to buy gold with prices bottoming.

U.S. Federal Spending Is Set to Top $4 Trillion

It’s imminent. The U.S. federal spending is set to top $4 trillion this year. The Congressional Budget Office released its growth projections and estimated that the deficit will increase by more than $2 billion in the 2017 fiscal year from the year prior.

What this means for investors: How long can this remain sustainable? Despite being so deep in the red on the balance sheet, the federal government continues to increase its rate of borrowing and spending. Moreover, excessive budget deficit spending ultimately leads to inflation, possible debt default, higher taxes, and lack of economic growth.

Ron Paul on the Stock Market

This week Ron Paul cautioned too much optimism in this stock market. Check this recent video from Ron Paul on CNBC…

What this means for investors: How long can this excessive spending remain sustainable? Despite being so deep in the red on the balance sheet, the federal government continues to increase its rate of borrowing and spending. If Paul’s prediction is correct, this could trigger a significant gold rally.

North Korea Threat Boosts Uncertainty

North Korean Army Officer

Global and political threats have a deep impact on gold prices. When there is fear on these fronts, people flock to gold. This week North Korea allegedly conducted a successful test of an ICBM (intercontinental ballistic missile) that sparked some uncertainty fears in the market, and boosted gold. Secretary of State Rex Tillerson and President Trump condemned the tests in the sternest tone and warned of retaliation against North Korean aggression. They also called on stronger efforts by the Chinese to contain the North Korean threat.

What this means for investors: Geopolitical uncertainty of conflict is one factor that could boost gold in the future. In further news on the political front, the G20 summit this week in Hamburg, Germany between leaders of the countries with the 20 largest economies prompted investor fear of trade war . This could negatively affect economic global growth as prices and tariffs soar. Gold is historically the safest haven during such trade wars as well.

Subscribe Now to Get the Gold Market Discussion Delivered Direct to Your Inbox

Leave this field empty if you're human:

Here are some articles from the web discussing the topics in this week’s post:

As always, I encourage you to speak with your broker at RME for more market updates. Expert brokers are available Monday-Friday from 9 AM- 5 PM or by special appointment after hours. Call today at 602-955-6500 or toll-free at 877-354-4040.

“I’ll be keeping a sharp eye on the market and I encourage you to do the same!”